U.S. Economy Shows Resilience Amid Challenges

The U.S. economy saw a slowdown in growth in the fourth quarter due to increased imports and a Boeing strike. However, strong domestic demand has kept consumer spending robust. Despite challenges, the economy remains resilient, as shown by steady consumer spending and a resilient labor market.

The U.S. economy witnessed a decline in growth during the fourth quarter, attributed largely to a surge in imports and the impact of a Boeing strike on aircraft spending. Nevertheless, robust domestic demand is expected to keep the Federal Reserve cautious about interest rate cuts this year.

According to the Commerce Department's advance GDP report, consumer spending maintained a strong growth pace last quarter, supported by a healthy labor market that enabled solid wage gains. While the economy's growth rate slowed compared to the previous quarter, the U.S. defied recession predictions despite the Fed's aggressive rate hikes in recent years.

The Federal Reserve recently left its interest rate unchanged at 4.25%-4.50%. However, it did flag concerns over inflation meeting its 2% target, with Fed Chair Jerome Powell affirming the economy's overall strength. Economists remain concerned about the economic impact of policies from the Trump administration, including tariffs and tax cuts, which could drive inflation up and hamper economic growth.

(With inputs from agencies.)